I have not been in a courtroom since the first part of March. Courts have adapted to life under Covid-19 with a combination of telephonic and video hearings. I have attended several CLE presentations on virtual court and have some observations of my own. Here are some tips.If you are not 15 minutes early, you are late. When working with technology, assume that you may have problems and dial in/log in early. Sometimes you may input the wrong access code and have to look it up. Other times the court's phone line may be overloaded and you may have to try multiple times. You may notice that the battery on your laptop is almost dead and to go searching for the cord. Judges hate it when you log into a hearing which is already in progress. I have heard one judge order a late participant to hang up. Make sure you know what technology the court is using. Prior to one hearing, I noticed a blurb about Webex video hearings on the court's website and decided to log in that way. What I didn't notice was that the court wasn't using Webex yet and I ended waiting for a connection that never came with the result that I violated Rule 1.Don't use a speakerphone. Speakerphones produce bad sound quality. However, you don't want to hold the phone to your ear the entire team so it is best to get some technology. I have tried both ear buds and a headset to connect to my cell phone by bluetooth. I found that the earbuds tend to fall out so I prefer the headset.Mute your phone when not speaking. The judge does not want to hear your dog barking or you asking for more coffee. State your name before speaking. Seriously, this was a rule for in person court but it is all the more important for virtual court. Wait your turn. Another thing judges hate is when people interrupt. It muddies the record and is rude. Typically, judges will tell you the order in which they will call on people. If the judge fails to call on you, then you should pipe up before he moves on but you should be very patient.Exhibits  are tricky. You still have to exchange exhibits in advance just like before. However, you can't hand them to the courtroom deputy or place a copy on the witness stand like we would do in IRL court. Make sure that everyone has a set of exhibit books in advance, including the court and the witness. Don't count on being able to pull up an exhibit on the screen. Different courts may have different capabilities. See Rule 2.When presenting direct testimony, it is good to prepare a written proffer, file it with the court and then send it to all the parties, including the court. This is probably a good time to point out that while the prohibition on ex parte contacts still applies, the courtroom deputy and law clerk are the gatekeepers for getting the judge what he needs. Know their email addresses.If you are appearing by video, dress like you are in court. Today will be only the second time since mid-March that I have worn a coat and tie. Hopefully I still remember how ties work.Finally, an anecdote. I recently participated in a day long hearing in Alaska on a claims objection. My client was a witness so I was just monitoring the hearing.The sponsoring attorney spent days working on her proffer because she was not a party and did not want to have words put in her mouth. The hearing got started late because someone was calling in from a location with bad cell service and the static overpowered the line. No one would fess up to creating the bad connection. We had to go through a series of having people hang up and dial back in until the connection was adequate.  When the time came for y client to be cross-examined, she had the exhibits on her laptop and could readily pull them up. She and I were in a conference room at my office. If I had wanted to mouth the answers to her or pass her notes, I could have. I did not for the reason that I believe in the rule that if you can get caught doing something wrong, you probably will. What are your stories from virtual court? I would love to hear them.

Commercial leases in New York City,COVID-19, Recent Protests and aStrategy to TerminateCommercial LeasesAs a result of COVID-19, recent protests and the advent oftechnologies such as Zoom and Google Meet, manytenants have excess office space/s that they cannot ordo not want to continue to rent and would like to endor terminate their lease or stop paying rent. At Shenwick & Associates, we have received many calls from clients with these issues and we have developed astrategy to address them. First, we review the company's financial informationincluding a recent balance sheet, income statement, the commercial lease and guaranty, if any. Second, we determine if the company is a candidate fora bankruptcy filing, either chapter 7 (a liquidation where thecompany closes as a result of the filing), a small businessSubchapter 5 bankruptcy filing, or a full-blown chapter 11business bankruptcy filing. In the case of a Chapter 7 filing, the lease will terminate;however, the Chapter 7 bankruptcy trustee appointed tothe case will also liquidate or close the business. Forbusinesses that are losing money or do not see a brightfuture, this may be a good strategy. A company that wants to remain in business, but terminateor reject their lease, should consider a bankruptcy filingunder  new Subchapter 5, which is a fast-paced, lesscostly chapter 11 business bankruptcy filing. As part of aSubchapter 5 bankruptcy filing, the lease can be rejected,and the landlord would be paid their lease rejectiondamages and other monies owed over 5 years or less fromdisposable income of the business. If Subchapter V does not work due to the debt limit of$7,500,000 or for other reasons, a company can considera full-blown chapter 11 bankruptcy filing. However, theywould want to consider the cost from a chapter 11 filing,versus the expected savings from rejecting the lease.Chapter 11 is a complicated, risky and expensive processfor many companies. Another strategy that we have been using withmuch success is preparing a bankruptcy petition,without filing the petition (a so called Pro-FormaBankruptcy Petition).This bankruptcy petition would accurately disclose theassets, liabilities and earnings of the company. Then wewould forward that bankruptcy petition to the landlordor their counsel indicating that if the tenant and landlordcannot reach an agreement where the tenant is allowed toterminate their lease (pursuant to a Lease SurrenderAgreement), then the tenant or company will file forbankruptcy. The benefit of this strategy is that it is quick,relatively inexpensive, the landlord gets financial disclosureregarding the company or tenants finances upfrontwithout litigation or discovery and we convince the landlordthat releasing the tenant from their lease is a “win-win” forboth the tenant and the landlord. How is this strategy a win for the landlord? Thelandlord keeps the tenant’s security deposit, theLandlord will also  save substantial money onbankruptcy and landlord tenant legal fees, theyremove an unprofitable tenant from their building,and they obtain possession of the premises quickly allowingthem to re-let the space. One of the reasons that we have had much success with thisstrategy in these trying times is that we have been filing bankruptcy petitions  for individuals and businesses forover 20 years and the landlord or their counsel can Pacerour law firm’s bankruptcy filings, or visit ourwebsite and blog. Based upon our work and experience in this areaof the law,landlords realize that bankruptcy is a real optionfor the tenant not an idle threat.Clients or their advisors who would like todiscuss these strategies with Jim Shenwickor schedule a consultation can reach him at:phone: 212-541-6224or email: [email protected] look forward to hearing from you

If you are filing bankruptcy, Get Your Money Out of Wells Fargo. People filing bankruptcy get kicked when they are down, if they bank  at Wells Fargo. Wells Fargo sees your bankruptcy on your credit report and they freeze your checking and savings account.  At least they do if you have more than five thousand […] The post Get Your Money Out of Wells Fargo by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.

July 5, 2020Yahoo NewsThe application deadline for the Paycheck Protection Program was extended on Saturday after President Donald Trump signed the extension bill that Congress passed into law.Potential applicants now have until August 8 to request federal relief funds under the program intended to help businesses affected by the coronavirus pandemic.Around $130 billion in funds were left over when the original deadline came on June 30, with some businesses not knowing they are eligible for the program.  Visit Business Insider's homepage for more stories.President Donald Trump on Saturday signed into law an amendment to the Paycheck Protection Program that gives businesses affected by the coronavirus pandemic more time to apply for federal funds.The law extends the deadline to apply for the federal government's loan-based relief program to August 8. The original deadline to apply for the loans was June 30, but Congress moved quickly to extend the deadline after around $130 billion was left over from the initial $660 billion pot, NPR reported.The Senate initially approved the extension on Tuesday with unanimous consent, and the House of Representatives followed suit the next day. Trump signed the bill on July 4, giving potential recipients just over a month to apply for the remaining funds.As of June 30, more than 4.8 million loans have been approved totaling $520 billion, with the average loan amount around $107,000, according to the Small Business Administration.Here's what potential applicants should know before applying.What are Paycheck Protection Program fundsPaycheck Program Funds are federally backed loans that businesses can apply for to help cover expenses and maintain worker levels. Though they start as loans, businesses that meet specific criteria from the SBA can apply to have their loans forgiven so that they don't need to be paid back.Part of the program is that no fees will be attached to the loans for small businesses, no collateral is required, and repayment starts after six months. Interest rates are also set at 1%, according to the SBA.Who can apply for Paycheck Protection Program FundsWhile the program is intended for small businesses, that title covers more than just family-owned hardware stores and ice cream shops. As Business Insider's Dominick Reuter reported, freelancers and self-employed workers including gig-workers can also apply for funds.Businesses with more than 500 employees can also access funds if they meet the SBA's size standards. Business owners who are unsure of whether their enterprise counts as a small business can use the SBA's size standards tool, located on its website.What July and August applicants need to knowLoan applicants completing the process after June 5 are subject to new loan maturity guidelines. The SBA said recipients who applied before June 5 will be subject to a two-year maturity timeline while those applying after June 5 will have a five-year maturity timeline.Loans are also processed through local banks and lenders to streamline the process as opposed to having the federal government do it. The SBA provides a list of which lenders can process applications for and issue PPP loans on its website.How to get loans forgiven by the federal governmentThe SBA's website says loan forgiveness will be based on "employee retention criteria" and only be given if the funds are spent on "eligible expenses." The Payroll Protection Flexibility Act recently amended the program's rules so that only 60% of funds received have to go to payroll expenses in order for loans to be forgiven, as Business Insider's Joseph Zeballos-Roig reported.Even if borrowers don't use 60% on payroll, they can still apply for partial forgiveness. Businesses seeking this option need to fill out a five-page form that can be found on the SBA's website to apply for forgiveness after reviewing the rules for forgiveness.

We may tell our children in years to come that there was a time, especially if it was during rush hour on a rainy day, when you couldn't get a cab in New York City for love or money.  These days, the streets are mostly empty. It's estimated that 90% of the taxi business has dried up.That's part of the reason why the city, with help from the National Guard, started a program that pays cab drivers to deliver food to low-income housebound residents.Mouhamadou Aliyu, a yellow cab driver of many years standing, gets up before dawn to participate. He knows there's a health risk: "But this is my home, and yellow is what I do," he explained. "Right now, there is a pandemic. Our people, they are suffering. The city call us.  We are answering the call."mouhamadou-aliyu-b-620.jpgYellow cab driver Mouhamadou Aliyu.  CBS NEWS Drivers earn $53 a route. Each route entails about six deliveries, and it means waiting in line for hours to get fully loaded; lugging boxes of food up into crowded apartment complexes; and then cleaning up for the next run."It's very hard. It's very tough. Very challenging," Aliyu said.Nine hours, most of it waiting; two delivery runs = $106 for a day's work. Not even close to the amount he needs to pay even a fraction of his monthly expenses. "But, we're still hopeful," Aliyu told "Sunday Morning" special contributor Ted Koppel. "We're New Yorkers. We don't give up!"As a young immigrant from West Africa back in 1994, Aliyu saw Manhattan through rose-colored glasses: "I came here with nothing, nothing at all. This was my dream. As a yellow cab driver, to hold a medallion is like being on top of my game. This is where I want to be. This is the American dream."In 2003, he became an American citizen. By 2004, Aliyu had learned that you don't get rich just driving a cab; to make money, he was told, you need to own the taxi – and to own it, you need a special license: a medallion.taxi-medallion-620.jpg CBS NEWS The city paid for ads promoting the deal as essentially risk-free; and it was New York City that has made literally billions of dollars selling these medallions at auction. When there are more buyers than medallions, the price goes up. That, in theory, is where even an immigrant cab driver could get rich: "So I said, 'Why not?' But, in order for me to place a bid to go for the medallion, I have to raise $20,000. But I have only $7,000. So, I apply for credit card. I get approved. I call them, I say, 'Can I use it for anything I want?' They say, 'Yes, it's your money. You can do whatever you want with it.'"Koppel said, "Then you had $13,000 that you had on your two credit cards. $20,000 cash down, on a $331,000 bid.""Yes, that would be a loan. And you have to pay for the car, gas, maintenance, all that. But still, life was good. Even I would say life was great."Within about a year Aliyu's medallion had appreciated more than $100,000, and remarkably, the value kept rising. "Lucky me, I was able to buy a house here in the Bronx, a three-family house," He said. "So, things was good. And then, moving forward, the medallion value was going up. In 2013 the city auctioned medallion at $1,350,000."Seven years ago – in theory, on paper – Aliyu was a millionaire.taxi-medallion-headlines-620.jpg CBS NEWS"The only reason that it was worth over a million dollars was that there was some other immigrant who could be taken advantage of to pay that amount," said New York Times reporter Brian Rosenthal. "And not really even pay that amount, but be trapped in a loan that would shackle them in debt for the rest of their lives."Rosenthal won a Pulitzer Prize for his series exposing the taxi medallion scam. As he explained in the Times' documentary series "The Weekly," those medallions were money-makers … just not for the drivers."There was the city which sold the medallions, the brokers who collected commissions, and the bankers who wrote the loans and sold some of them for profit," he said. "And what we found in our reporting was that the value of the medallion went from $200,000 to over a million dollars, when the revenue that it had to bring in did not change at all.n Eventually, you realize that this wasn't by accident. Many insiders knew that the whole thing was a house of cards."The loans were never stable," Rosenthal said, "they were never sustainable, and they were always going to be a burden that was unpayable after this bubble popped. And that's what happened."Last summer, the New York City Council held a hearing on what was called the owner-driver crisis.  Mouhamadou Aliyu was one of the witnesses:"Every single day, every single hour, I think about taking my own life," he told city officials. "I think about suicide. The only thing that stops me is my four kids. If I do so, what's going to happen to them? I'm supposed to be a millionaire today, and I'm proud of it. And you guys are trying to take that away from me. It's not acceptable. I'm calling on you: Please! Please! Have mercy on us. Help us."Koppel said of Aliyu's testimony, "He speaks rather plaintively of his status as a millionaire: I'm a millionaire. He's never gonna see that day again, is he?""No, he's not," Rosenthal said. "I mean, he deserves it. He works very hard. I've met hundreds of these cab drivers, and they all work extremely hard."Many of the drivers are convinced that ride-share companies – like Lyft and Uber – ruined their business. Even without them, though, said Rosenthal, the medallion bubble had to burst.Six months ago, said Aliyu, the medallion was worth less than $100,000. What he still owes on that medallion, however, is more than $600,000. The chances that he'll ever be able to pay that off? Slim and none.One slender ray of sunshine: New York State's Attorney General is preparing to sue the City of New York to the tune of more than $800 million for misleading medallion owners. It could take years, and even that sum wouldn't make the drivers whole again.And then, of course, there's the pandemic. Well over 50 cab drivers have died from the virus since March. Most drivers these days are staying home; the few available fares just aren't worth the health risk.Aliyu said, "There is no more sleep. There is no night. At night we chat on the WhatsApp group, we're so worried. If nothing is done, when this pandemic will be over, the yellow cab industry will be over, too, will be finished."

As the economy continues to struggle there are going to be plenty of debt collection agencies scrambling to make settlement offers. They will present these offers to you like they’re offering you an incredible deal. “You owe $350,” the letter will gush. “But if you pay us $285.72 we’ll consider the whole debt settled.” Does […] The post Is it a Good Idea for Bucks County Residents to Settle Debts? appeared first on .

June 29, 2020MarketplaceMany economists and bankruptcy lawyers expect a wave of bankruptcies coming this year. Giant bankruptcies of companies that owe more than $100 million, are up 40% from a year ago, which means they are up 120% from 2018.  Chapter 11 bankruptcies of all kinds have increased 20% since last year. This is obviously traumatic for the people who work at those companies but there is a silver lining. “It’s an overstatement to say that bankruptcy is this deeply undesirable thing,” said Jared Ellias, professor of law at UC Hastings College of Law.“One of the great things that happens after bankruptcy is a company leaves, and they’re hopefully positioned to thrive,” he said. The post COVID-19 economy is going to be very different and a lot of businesses will need to radically reinvent and reinvest in themselves in order to adapt. Chapter 11 bankruptcy lets companies do that. Which is why Ellias and a group of academics are concerned that if there are too many bankruptcies, the courts might get overwhelmed and companies won’t get the help they need. “When a company is in financial trouble, they can’t invest, they can’t hire, they can’t give people pay raises, they can’t do the things that businesses need to do to be attractive places to work,” Ellias said. So if you slow down the process of transformation, it slows down the entire economy. “There have been proposals to bring back some retired bankruptcy judges, recently retired bankruptcy judges, and you also would need to add personnel at the clerk’s office level as well,” said Robert Keach, an attorney who specializes in business restructuring and insolvency at the Bernstein Shur law firm. Congress also made it a lot easier, faster, and cheaper for small businesses to go through the bankruptcy process through reforms in 2019 and through the CARES Act, according to Keach. But judges take time to hire, and there is only so much you can do, he said, so a lot will depend on just how bad the bankruptcy wave will be.

June 25, 2020ForbesThere are increasingly urgent signs that an unprecedented wave of student loan defaults could be arriving within a matter of months. A cratering economy and expanding pandemic are about to collide with the expiration of critical temporary student loan relief programs, and the end result could be catastrophic. Here’s what’s going on.The Economy Continues To Stagnate Unemployment remains at levels unseen since the Great Depression, with no signs of dramatic improvements. Last week, yet another 1.5 million Americans filed for unemployment benefits. Nearly 50 million Americans have filed for unemployment benefits over the past three months, and while this week’s numbers are far lower than initial jobless claims filed in March, the economy is not showing any signs of dramatic or rapid improvement. The Federal Reserve recently indicated that it expects unemployment to remain high through the end of the year and beyond.The Pandemic Appears To Be WorseningWhile the stay-home orders of March and April were successful in slowing the spread of the Coronavirus, those trends have now been reversed. Several states with large populations — Florida, Texas, and California — are seeing record increases in daily confirmed cases of Covid-19. Those three states contain over a quarter of the entire population of the United States. And Coronavirus cases are also increasing in two dozen other states, as well. Hospitalizations are also increasing in many localities. It is becoming quite clear to health experts that the pandemic is far from over, and we may be entering a new, even worse phase of the outbreak.  Federal Student Loan Relief Under The CARES Act Ends SoonIn the wake of the pandemic and economic collapse, Congress passed the CARES Act. Although the implementation of the CARES Act has been hugely problematic, the stimulus bill has provided critical relief to student loan borrowers in the form of an automatic suspension of payments and interest for all government-held federal student loans.That suspension, however is scheduled to expire on September 30, 2020 — less than 100 days from now. Over 40 million student loan borrowers will be hit with student loan bills by October, and many will be unable to afford their payments. Others who may be directly impacted by Covid-19 may not be able to manage the act of making a payment, even if they could afford to do so. Temporary Private Student Loan Relief Expires ImminentlyCongress limited the student loan relief under the CARES Act to government-held federal student loans. This effectively left millions of private student loan borrowers without any relief at all. However, several states stepped in to negotiate voluntary relief programs with dozens of private student loan lenders and servicers. The resulting multi-state pact provided millions of private student loan borrowers with temporary relief in the form of suspended payments and a cessation of negative credit reporting.That temporary relief, however, was typically limited to 90 days. Private student loan borrowers who took advantage of those relief options in March or April may have no other options when that relief imminently expires. Since private student loans are not eligible for income-driven repayment programs or long periods of hardship-based forbearance, defaulting will be an inevitable outcome for many borrowers.  Bottom LineAll signs point to a looming catastrophe for millions of student loan borrowers. To avoid disaster, Congressional action is likely required. The Democratic-controlled House of Representatives recently passed the HEROES Act, which would extend the CARES Act’s student loan provisions by a full year to September of 2021. But Senate Republicans have rejected this bill. A coalition of over 60 organizations have also called on Congress to extend the CARES Act for student loan borrowers and forgive a substantial amount of student loan debt, although Senate GOP leaders have shown no interest in such broad relief to date. Without a bipartisan solution, student loan borrowers will start falling into default at an ever-increasing rate. Time is running out.

…But the Car Still Has to Pay. When you file Chapter 7 bankruptcy, that means you don’t have to make the car payments. But that does not mean you get a free car. You don’t have to make the car payments, but the car still has to pay. That’s because the car finance company is […] The post After bankruptcy….the car still has to pay! by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed - .

  The Bankruptcy Court for the Southern District of New York had the opportunity to rule on the availability of sanctions for a discharge violation regarding collection of discharged taxes against both the IRS and a contractor for the IRS in In re Starling, 2020 Bankr. LEXIS 1627, Case No 13-36564 (CGM), (Bankr. S.D.N.Y., 19 June 2020).  The case involved taxes discharged in a chapter 13 case where the discharge was entered on 21 May 2016.  On 6 November 2017 the debtor received a notice that the tax debt was assigned to ConServe, a private collection agency.  Debtor promptly sent a letter to the IRS dated 8 November 2017 warning of the violation of the automatic stay (sic).  ConServe, undeterred by such warning, sent additional 'Annual Tax Delinquency' notices on 7 November 2018 and 7 November 2019.  The IRS ceased collection activity on 22 November 2019 pursuant to 26 U.S.C. §6502 which limits the time the IRS may collect on an assessment.  The Debtor filed a motion for contempt seeking to hold the IRS and Conserve in contempt for violation of the discharge injunction under 11 U.S.C. 524.  Debtor sought compensatory damages, attorneys fees, and $10,000 of punitive damages.  The IRS denied subject matter jurisdiction due to the failure of the debtor to exhaust his administrative remedies, and denied that the debt was in fact discharged.   The court found that §7433 of the Internal Revenue Code does not limit the court's jurisdiction.  Rather, federal subject matter jurisdiction is governed by 28 U.S.C. §1334 which provides district courts jurisdiction over 'all civil proceedings arising under title 11, or arising in or related to cases under title 11.'  The court thus has subject matter jurisdiction under §1334(a), §157(b) and the standing order of reference by the district court.  26 U.S.C. §7433(e) codifies the power of the bankruptcy court to hear and determine sanctions matters against the IRS.  This section provides that a petition made to the bankruptcy court is the exclusive remedy for a violation of the bankruptcy discharge.  26 U.S.C. §7433(e)(2)(A).  Further, 11 U.S.C. §106(a)(2) permits the court to hear any issue arising with respect to the application of such sections to governmental units, and §106(b) states that a governmental unit that has filed a proof of claim (as it did in this case) is deemed to have waived sovereign immunity with respect to a claim against such governmental unit that is property of the estate and arose out of the same transaction or concurrence out of which the claim arose.   As to exhaustion of administrative remedies, the court found a conflict between 26 U.S.C. §7433 which requires exhaustion of such remedies prior to bringing an action for violation of the discharge injunction, and 11 U.S.C. §106 which appears to allow such actions.  Given that §7433 is the more specific statute, the rules of statutory construction require the court to give effect to such requirement.  Debtor;s letter to the Commissioner of the IRS advising that Debtor's discharge was violated did not satisfy this requirement as it did not contain 'the dollar amount of the claim, including any damages that have not yet been incurred but which are reasonably foreseeable' as required by 26 C.F.R. §301.7533-2(e).  Thus the court denied the request for damages against the IRS.  The debtor had better luck with the claim against ConServe.  As a private contractor, ConServe is not afforded the same protections as the IRS for violations of the discharge injunction.  26 U.S.C. §7433A(b)(4) permits taxpayers to bring actions for damages against contractors that violate the discharge injunction.    The went on to find that the taxes were dischargeable in that the returns were filed almost 6 years prior to the date of the bankruptcy.  While the IRS prepared a substitute for return pursuant to §6020(b) of the Internal Revenue Code, the 2005 amendments added a hanging paragraph to §523(a) providing that a return means a return that satisfied the requirements of applicable nonbankruptcy law but does not include a return made pursuant to §6020(b).  While this did not resolve the split in the circuits regarding substitutes for returns, the court followed the 11th Circuit case, Mass. Dept. of Rev. v. Shek, 947 F.3d 770, 781 (11th Cir. 2020) finding that a late-filed return may still qualify as a return for bankruptcy purposes, and thus the taxes qualified as dischargeable in the chapter 13. Finally, the Court found that the debtor satisfied the requirements to show a contempt order is warranted.  The debtor established that 1) the order violated was clear and unambiguous, 2) the proof of noncompliance was clear and convincing, and 3) the contemnor has not diligently attempted to comply in a reasonable manner.1  No adversary proceeding is necessary by the debtor to determine that the taxes are dischargeable in order to give effect to the discharge injunction.  The burden of demonstrating that any of the tax debt meets the exception to discharge is born by the IRS.  The Court awarded compensatory damages of $500 for each notice issued by Conserve, and awarded total attorneys fees of $2,644.  The Court denied the request for punitive damages.1 King v. Allied Vision, Ltd., 65 F.3d 1051, 1058 (2d Cir. 1995).↩Michael Barnett, Esq.Law Offices of Larry Heinkel, PA506 N Armenia Ave.Tampa, FL 33609813 870-3100https://myfloridabankruptcylawyer.com